The perfect Holly Golightly ... Audrey Hepburn in the film of Breakfast at Tiffany's. Photograph: Everett Collection/Rex Features

This month, Anna Friel is set to star as Holly Golightly in a West End stage adaptation of the Hollywood version of Truman Capote's novella. This chain of revisions might seem excessive, but it is quite fitting for a story such as Breakfast at Tiffany's, which is, in every sense, a romance about reinvention.

It doesn't take much these days for a tale to be described as a "Cinderella story": anything resembling a makeover, however superficial, will usually suffice. But Breakfast at Tiffany's really is a variation on the Cinderella theme, the tale of a young girl who escapes a dangerous adolescence and transforms herself through aspiration – a sheer act of will – but who may not live happily ever after. Like Cinderella, it is a story about struggling to escape. And it is a story about self-fashioning. Breakfast at Tiffany's suggests to every woman – and many of the men – in the audience that they could reinvent themselves, liberate the golden girl hidden beneath ordinary, even debased, trappings.

Much of the writing about the film of Breakfast at Tiffany's acknowledges that when Hollywood bought the rights to the story, Capote wanted Marilyn Monroe to play Holly Golightly. Most accounts treat this as yet another of Capote's many idiosyncracies, if they consider it at all – who could imagine Monroe instead of Audrey Hepburn in one of her most iconic roles? But for anyone familiar with either Monroe or the novella, it's not really that much of a stretch.

In fact, as many of the film's first critics observed, Hepburn is entirely wrong for Holly, a character who turns out to be a vagrant from west Texas whose real name is Lulamae Barnes. It is difficult to conceive of a woman less likely ever to have been called Lulamae, let alone "a hillbilly or an Okie or what" (as Holly's agent OJ Berman refers to Lulamae) than Audrey Hepburn. She could be an ingénue, a naif, anything French you like. But a redneck? A hick from a Texas dirt-farm? That's even more implausible than Cary Grant as an Oregon lumberjack in To Catch a Thief some five years earlier. Every inch of Audrey Hepburn exudes aristocratic chic.

Monroe, by contrast, whom Capote knew well, though raised in California rather than Texas, was originally named Norma Jeane (with an E, like Lulamae), and her parallels with Capote's Holly do not end there. She was a depression-era orphan who was both exploited and saved by older men. As an adult she would allude to childhood molestations (when reckoning how many lovers she's had, Capote's Holly dismisses "anything that happened before I was 13, because, after all, that just doesn't count"). She has an upturned nose, tousled, "somewhat self-induced" short, blonde hair ("strands of albino-blonde and yellow") and "large eyes, a little blue, a little green".

She is befriended by an extremely short, powerful Hollywood agent who recognises her potential and helps her reinvent herself, renaming her and providing her with access to education and a more sophisticated veneer. She runs away to New York just as success in Hollywood seems assured – although Holly, unlike Monroe, knows she doesn't have it in her to be a star, because she lacks the drive that precisely characterised Monroe (as Capote understood). Like Monroe, Holly is in it for the "self-improvement", as she tells the narrator. She's been around the block, for which she never apologises, and she ends as an icon, a fertility symbol (the narrator sees a picture of Holly carved as an African fetish). Most of all, Monroe, like Capote's Holly, "is a phony. But on the other hand . . . she isn't a phony because she's a real phony". The novella's Holly, her agent knows, is "strictly a girl you'll read where she ends up at the bottom of a bottle of Seconals". Mind you, the novella was published in 1958: four years before Monroe ended up at the bottom of a bottle of Nembutals. It's a fable about a Monroe manqué, who lacks her ambition – and may thus escape her fate.

Blake Edwards's film adaptation was released in 1961, a little less than a year before Monroe died. And much to her disappointment, she didn't win the part that had been written for, and about, her. Holly could have been the performance of a lifetime – as it would have been the performance of her lifetime. Moreover Holly, despite being blonde, is decidedly not dumb, and Monroe was desperate to escape being typecast.

But Hepburn won the part, and in retrospect it is easy to see why. Hepburn, far more than Monroe, had become indelibly associated with the transformative Cinderella makeover. Although Holly, like Monroe – and like Capote, in fact – all sprang from a Platonic conception of themselves (in F Scott Fitzgerald's famous phrase), for them the fissures between the earlier self and the public persona always showed, and threatened to split them apart. Hepburn was the only one whose stardom seemed to reflect her authentic self – as if she were not an actor but a true princess, an authentic queen.

In one way, Capote was certainly an authentic queen. But he was never able to shed his sense of belonging on the margins. The neglected child from Louisiana, the prodigy who transformed himself into a celebrity, never believed that he belonged in the castle. As he wrote of his own alter ego, the unnamed narrator of Tiffany's, he lived perpetually with "his nose pressed on the glass", wanting "awfully to be on the inside staring out". Capote, who was born Truman Parsons, was himself an aspiring Cinderella; like Holly he was renamed, reinvented, and left eternally waiting for the right fairy godmother.

Cinderella was not, originally, a poor child raised to the rank of princess. In the stories of Charles Perrault and the Brothers Grimm, Cinderella begins life in privilege and wealth – in earlier versions she's even a princess – who is wrongly deprived of her rightful status by those who envy her power and beauty. It is less a story of metamorphosis than of revelation: the transformation only reveals the original self. On screen, we never saw Norma Jeane become Monroe: we knew her only after the fall. But for Hepburn, every definitive role leading up to Breakfast at Tiffany's – and continuing to My Fair Lady – featured her being transformed, the butterfly emerging from the chrysalis. And unlike Monroe, who was always seen as having transformed into something artificial, Hepburn was only ever transformed back into her own luminous, immanent self.

The story of our culture's subsequent love affair with the film of Breakfast at Tiffany's – and not with the novella, which may be admired, and certainly has the cachet of its author, but is hardly well-beloved, much less well-read – is really about our love affair with Audrey Hepburn, the movie star. The persona she consistently projected was of authentic, intrinsic refinement, of chic sophistication that was never brittle or cold, of an instinctive stylishness that reached its epitome in Breakfast at Tiffany's. The moment when Hepburn first emerges in the film still ranks as one of the great screen makeovers of all time.

The title credits roll over a scene of condensed, symbolic wishing: Hollywood as dream factory. Hepburn is standing, very slim, in a long, black column dress with a glittering, enormous collar necklace and the trademark black sunglasses that Jackie O would adopt a few years later. (Jackie O's supposedly iconic looks markedly resemble Hepburn's from a few years earlier.) The camera encourages us to gaze longingly with her through the Tiffany's window at diamonds and other jewels; and then she strolls up the street, munching the doughnut that we know is probably the only doughnut Hepburn ever ate in her life. But it is precisely these little touches of normality, of the ordinary, that humanised Hepburn's image.

The next time we see her, she is asleep, wearing an absurd eye-mask and dangling ear-plugs with little blue tassels. She groggily awakes and pulls on a man's tuxedo shirt – one of the film's few insinuations that she may entertain "gentlemen callers" overnight – and, hair awry, opens the door to George Peppard, playing Capote's alter ego: straightened, masculinised and elongated (Capote was just 5ft 3in). Paul Varjak – as the film arbitrarily names the writer who will be cast as Holly's obligatory love interest – is locked out; Holly lets him in and realises that she has an appointment. A frantic rush to get dressed ensues, as Holly hunts for alligator pumps, brushes her teeth, puts on an enormous hat, and emerges from the bedroom as – voilà! – Audrey Hepburn. The camera lingers lovingly on a close-up of her dazzling smile as she asks, half-coyly, half-sweetly: "Surprised?" "Amazed," responds Varjak – and so are we, the transformation is so quick, so easy, so absolute. Or we would be amazed, if it weren't for the fact that we were always waiting for it.

One of the things that makes this transformation so effective is its apparent effortlessness. All she needs are the right hat and a little black dress (it was Hepburn who turned the LBD into the wardrobe staple it remains today) and there she is, like magic, with the wave of a fairy godmother's wand. From Now, Voyager to Pretty Woman, Hollywood has sold stories that centre on metamorphosis, when ugly ducklings become beautiful swans or streetwalkers become homemakers. The appeal of transformation is the appeal of self-improvement: some women are born beautiful, some have beauty thrust upon them – but Hollywood promises that beauty can be achieved. The romance of Breakfast at Tiffany's is not really with Peppard (in the only leading role he'll be remembered for) but with Hepburn herself, with the fantasy of artless sophistication she embodies. Hepburn (again, unlike Monroe) never appeared to try too hard.

Hepburn's iconic transfigurations extend back to her first, Oscar-winning, starring role in Roman Holiday in 1953 (the same year, incidentally, of Monroe's breakthrough role in Niagara). In a kind of inside-out Cinderella story, Hepburn, as Princess Ann, has one perfect day in Rome, riding around on the back of Gregory Peck's moped, before the clock strikes midnight and she returns to her duties, without Prince Charming, but secure in the knowledge of his love. And part of her metamorphosis comes when she crops her hair, trades a few accessories, including her shoes, rolls up her sleeves, unbuttons her collar, and instantly achieves the insouciant gamine look that would become her trademark.

Hepburn's next film, Sabrina, featured a more prolonged transformation, again from pony-tailed adolescent into pixie-cropped personification of soignée style. Sabrina added a fairy godfather in the form of a French baron so old that his intentions – and hence her morals – are never in question. Soon after came Funny Face, and another makeover, the first that the story represents as requiring an army of fashionistas and photographers (but only because it takes that many to overcome her character's resistance to being objectified). Eventually, with My Fair Lady, Hepburn would play the ultimate transformed object in Eliza Doolittle, a woman who is initially not at all the author of her own transformation. When Hepburn started playing Galatea, she stopped being Cinderella – for good. It was almost as if she didn't have to, because her definitive persona had been fixed. The princess had emerged.

The film of Breakfast at Tiffany's, like Capote's novella, sees Holly as half-Cinderella, half-Galatea. She has her Pygmalion figures – first Doc, who saves her, and begins to educate her, however primitively; then OJ Berman, who teaches her to speak correctly (by teaching her French in order to learn English) but doesn't quite succeed in teaching her how to behave. It is at this point that Capote's Galatea, like a female Huck Finn, lights out for the territories, escaping the confinements of "sivilization".

But Hollywood would never release Hepburn into the wild – not least because she so patently doesn't belong there. The film also has a romance with New York, which it doesn't want her to leave. So along comes the final Pygmalion, the writer Paul Varjak, who finishes domesticating Holly. Capote's Holly is too mobile and erratic for a Hollywood just emerging from the 1950s. She is a vagrant playgirl; her only permanent state, as she prints on her calling cards, is that she is "Miss Holiday Golightly, Travelling". And it means something very different for a woman to be a tramp than for a man.

This is why, for the story to work as a romance, Holly's indiscretions need to be cancelled out, as it were, by those of a lover who has also fallen prey to the lure of sexual economics, who has also sold himself. It is not just that Hollywood has to inject a love story wherever it finds a beautiful woman (although that is certainly the case) but that the man must ultimately redeem her, and himself, from a life of sexual opportunism that she describes in euphemistic terms as receiving money "for trips to the powder room", and he describes as "having a decorator".

Like Fitzgerald's The Great Gatsby, Breakfast at Tiffany's is fundamentally a story of the American dream. Capote's novella, if not about nightmares, is certainly about the costs of the dream. The film – like most Hollywood movies – is determined to view dreams as wish-fulfilment. And by no coincidence it took a European movie star with aristocratic heritage to bring the American dream to life in all its sentimental romance, because the American dream is, in part, a dream about being the real thing, about belonging. Like Holly Golightly and Monroe, Jay Gatsby is a real phony. But Hepburn was a dream of authenticity rather than imitation, of success rather than failure, of security rather than escape.

You can call it sentimental, even cloying, cheap, manipulative. Capote certainly did, and many critics followed suit: an early review declared that Hepburn was "viciously, pathologically miscast" as Holly. This is undeniable – but it is also why the film works on its own terms, and has become so culturally distinct from the novella. Despite how much of the story and even of Capote's dialogue it keeps, it is a fundamentally different tale because its tone and mood is so at odds with Capote's. The film is, in a word, sunny; it is full of hope. The novella is full of shadows and terrors.

In the end, though, shadows are no truer than sunlight. Edwards's film is unquestionably escapist, and it eagerly encourages us not to think about how sordid and sad its characters and story actually are. That's what romance is. And in fact Capote's novella is rife with its own sentimentalities, in love with a romantic notion of loss and escape. Capote's Holly is essentially a variation on the hooker with a heart of gold, and the novella is dominated by a kind of willed cynicism, a veneer of sophisticated experience belied by the ending, in which the narrator sighs over his unconvincing hope that this "wild thing" has at last found a home. The film Breakfast at Tiffany's is dominated by the obverse mood, a willed innocence, a romance with romance itself. But in fact the innocence of Capote's Holly is willed, too – which is what Hollywood gets right. As she tells the narrator in the novella: "I haven't anything against whores. Except this: some of them may have an honest tongue but they all have dishonest hearts. I mean, you can't bang the guy and cash his cheques and at least not try to love him." The morality lies in the effort to have an honest heart, genuinely to feel the emotion: and the film shares this moral code. Hollywood has always pandered to us, selling a vast, vulgar and meretricious beauty. The makers of the film are, metaphorically speaking, banging Holly; they're exploiting her story, selling her out, maybe even corrupting her – but they are also trying very hard to love her, and they want us to love her, too.

Breakfast at Tiffany's is at the Theatre Royal Haymarket, London SW1, from 9 September. Box office: 0845 481 1870.